Just about everyone on Earth dreams about traveling it. Many imagine traveling the world in luxury. Others imagine saving money through travel hacks like hostels and voluntourism.

The truth is that there is an in-between where you travel in comfort without racking up credit card debt. In this article, we’ll break down the main expenses so you know how much money you need to travel the world for a year. 

Before we get to the hard numbers, we need to establish the expenses behind them. We’ll get started with the most immediate expense when traveling the world.

Transportation expenses

You can’t travel without transportation — literally. Figuring out your transportation expenses is complicated since there are many types of transportation with varying costs.

For example, a single flight between European countries will cost at least a couple of hundred Euros. However, EU Rail has several options that can fit any type of trip, but their best value is the Global Pass which gives you access to high-speed rails for 15 days over an 11-month period for under $600. Other countries like Japan also have rail systems that are a great way to save money on your world trip.

The cost of train travel can be even less depending on the country you’re in since many developing countries have budget-friendly options. For example, in India, you can travel by train for 30 days for under $500.

If you’re flexible with your dates, then a flight could be steeply discounted if you book it early or later using a site like Skyscanner. This hack is especially helpful when traveling long distances, like from Eastern Europe to Southeast Asia.

Accommodation costs

Another immediate cost to consider is your accommodations. Hostels are a great way to save money; one somewhere like London could average $40-$80 a night. Services like Airbnb also make it affordable to book an entire home or private room if you rent over several weeks.

You can even stay for free in developing countries through volunteer programs like this opportunity in Nepal and avoid rentals completely. If you have friends or family all over the world, then you can also save money by couch surfing.

Food and dining expenses

Your food costs depend most on the parts of the world you’re traveling through. For example, if you’re traveling through Southeast Asia then you could spend as little as $10 a day per person on food. The low cost of the food is due to the high number of street food options. Plus, eating street foods is a great way to experience local culture and the ingredients that the land produces!

In a more developed region, you’re likely to spend at least $50 a day on food. Of course, you could spend more if you decide to splurge on a meal in a country like Italy or France where high-quality food is part of the culture.

Still, you can expect to spend between $10-$50 a day on food while traveling the world for a year.

Activities and attractions

Don’t forget about your activities. A simple example is hiking through a region. Access is often free (or just a small entrance), most tourist trails are well mapped out and clearly marked (especially in countries like New Zealand where hiking is a major tourist attraction) so you don’t have to pay a guide, and you only need basic gear like boots and a backpack.

The more involved your activity, the more money you’ll need. For example, going on a safari in Africa that includes guides and lodging can cost upwards of $200 per person per night. You can mitigate some of that by choosing activities in areas with lower costs, like guided day trips in South America’s Amazon rainforest.

However, in some cases, an activity might also cover your food costs for the day. For example, a street food tour in Vietnam could cost $75-$100, but it also includes everything you’d eat for half the day — or even the full day.

Travel insurance and visa fees

Lastly, you can’t forget about travel insurance and visa fees if you’re calculating the cost of traveling the world.

Some countries have unique visa requirements and prices, while others are covered under a blanket system (like in Europe).

Regardless, you can expect to pay anywhere from $30 in some developing countries to over $180 as you will for a visa to the United States. You can save on visa costs by choosing regions like Europe, where a single visa will cover many countries. You can also choose a large country with many different regions, like Australia, to get the most bang for your buck.

Travel insurance can also vary based on factors like your coverage options. Many travel insurance policies are focused on trip cancellation, but long-term travelers can find insurance policies for as little as $11 a week. If you travel for a full year, that comes to under $600.

Ready to create your world travel budget now that you’ve seen the costs laid out? There are just a few more steps before you have a budget for your bucket list trip around the world.

Research destinations and their cost of living

The first step is to build your list of destinations. Deciding where you’re going to visit is a blast, but it also determines how much you’ll need for each leg of your trip. Sometimes, even regions within the same country can have different living costs, so decide exactly where you want to go and then research the destination’s basic costs.

Determine the duration of your trip

You’ll also need to decide how long you want to be in each place.  Research how much it will cost to eat in one country and then multiply that by the number of days you’ll be there to get the most accurate estimate.

Set priorities and allocate funds

Once you know how much it will cost you to stay in each country on your journey around the world, you can decide which stops are the most important to you. For example, spending three months in Thailand may cost you the same as spending a month in Australia. If you love Australia’s culture, though, that tradeoff may be well worth it! 

Track expenses and adjust the budget

Don’t forget that each step of making your travel budget will be for nothing if you don’t follow through with it. 

If you spend what you budgeted for three months of your journey in the first month of your trip, you’ll be in serious danger of running out of money. That said, always expect the unexpected and be prepared to adjust your budget if needed. For example, this may mean deferring to a budget travel provider instead of a premium one — but you’ll still be on your dream trip.

Now you have all the tools to create a plan to travel the world, but seeing something done is always more helpful than a list of instructions. That’s why we’ve created budgets and cost estimates for three different types of travelers as examples for you to follow. 

Budget option: Backpacking and budget-friendly destinations

The first is a low-cost backpacker budget, where the top priority is minimizing costs to maximize the number of experiences you can afford.

• Estimated transportation costs: We’ll start with how much you might spend on your transportation costs. That means taking full advantage of trains, flying on budget airlines, and using buses whenever possible. In this case, we would estimate that for world travel for a year, you would spend around $4,500.
• Estimated accommodation costs: Even backpackers need a place to stay, so the next step is to consider how much the low-cost backpacker would spend on their accommodations. This budget means hostels and hotels in low-cost-of-living countries. Still, for this budget, we estimate that the traveler would spend around $5,000 on their accommodations for a trip around the world.
• Estimated food and dining costs: We can’t forget about food. That means avoiding splurge meals and taking advantage of staple foods for the backpacker tier. With that considered, the cost of food on a backpacker's budget comes out to $3,000 for a year of world travel.
• Estimated activities costs: When it comes to activities and excursions, this traveler would need to sightsee and hike while limiting guided tours. In this case, we estimate that the activity cost for a year of travel would be $2,500.

Mid-range option:  Comfortable travel with moderate expenses

Looking for a trip that balances expenses with experiences? Look no further than our mid-range budget with cost-saving options like hostels and buses and splurges in affordable areas.

• Estimated transportation costs: We estimate $5,500 for a year of travel in this tier. That means a healthy mix of trains and buses when necessary. We also planned for booking flights when the prices are at their absolute lowest.
• Estimated accommodation costs: Next, the mid-range traveler would spend around $10,000 to $15,000 on their accommodations during their journey worldwide. This is if they opted for a combination of hostel stays (which can be as low as $3 per night in some countries) and nicer hotels (averaging around $100 per night).
• Estimated food and dining costs: We calculated the cost of food using a similar logic where the traveler opts for low-cost foods when possible. After all, the best way to know a culture is through its food, right? If the average mid-range traveler aims to spend no more than $20 per day on food (it could be significantly less in certain countries), it would cost about $7,300 for a year of travel around the world. However, some tips to keep food costs lower include opting for local cuisine whenever possible and buying ingredients and preparing some of your own meals.
• Estimated activities costs: Lastly, there are activities to consider. Activities for the mid-range traveler would cost around $3,000 since they’re hiring guides and buying some gear along the way.

Luxury option: High-end travel experiences and luxury accommodations

Of course, there’s always the luxury traveler. This person prioritizes high-end experiences and accommodations whenever possible, regardless of if they’re in Eastern Europe or New York City.

• Estimated transportation costs: The truth is that there is no limit on how much a luxury traveler can spend during a trip around the world. We’ve estimated that the luxury traveler would spend around $15,000 to $20,000 on travel during their journey, but they could go well beyond that if they wanted to.
• Estimated accommodation costs: Accommodations could also be a large expense considering the number of luxury hotels in the world. We estimate that the luxury traveler would spend upwards of $20,000 while traveling around the world.
• Estimated food and dining costs: Food is another category where costs could add up quickly. We decided that eating luxury foods on a year of travel across the world would add up to $15,000.
• Estimated activities costs: You can’t travel in luxury without luxury activities. If you want to splurge on luxury activities like guided tours in rare places, then it will cost you $10,000 while traveling the world for a year.

Start saving for your world travels with Accrue Savings

Still with us? It may seem like a ton of work to plan a trip around the world. If you’re considering it, you’re likely unafraid of rolling your sleeves up to create something incredible. 

Now that you have a list of the main costs of traveling around the world, you can estimate the costs in each category at all your stops by researching them through travel blogs and trending travel hacks. It may seem daunting at first, but there is a ton of information online that provides thousands of travel planning hacks and tips.

You can jump-start saving for your trip with Accrue Savings to help knock your dream trip off your bucket list. Accrue makes reaching your goals easier by rewarding those who plan and save through exclusive partnerships with great brands like CheapOair. In this case, that means rewards for booking your year of travel so you can follow your dreams without going into debt!